Failing Rail, Ports Are New South African Growth Risk, SARB Says

South Africa’s central bank is concerned that the country’s failing port and rail network is thwarting efforts to revive the economy, just as the energy supply begins to show signs of recovery.

The bank marginally raised its growth forecast for 2024 and 2025 to 1.2% and 1.3% respectively on expectations that power cuts will be reduced, while warning that logistics challenges have become a serious constraint. The bank kept rates unchanged for the third consecutive meeting on Thursday.

“Logistics constraints are likely to have broader effects on the cost of doing business and the cost of living,” the monetary policy committee said in its statement.

The bank has actively sought to convince the government to be more responsive to infrastructure failings that it says have hampered its work and forced it to adopt a more restrictive monetary policy. State power utility Eskom Holdings SOC Ltd. and port and freight rail operator Transnet SOC Ltd. are being led by acting chief executive officers and are in dire financial straits.